The New Search Powers Available to the JSOT
Investigators Under the Criminal Code
The JSOT concept is to put police investigative
powers in the hands of OSC investigators to pursue
corporate criminals and support proceedings in the
OCJ. The Criminal Code warranting provisions permit
the JSOT investigators to “use any device or
investigative technique or procedure or do
anything described in the warrant that
would, if not authorized, constitute an
unreasonable search or search.”
In theory, an investigator may
make use of a broad array of novel
and flexible investigative techniques
so long as the pre-conditions for
these special search warrants are
met and a judicial officer authorizes
the search prior to its execution.
The Criminal Code warranting
provisions were drafted broadly in order
to enhance flexibility and permit investigators to
readily integrate new technologies to their arsenal
of investigative tools. Given the breadth of the
provisions, their application to the securities industry
could involve the use of:
• Electronic Surveillance: Electronic devices
such as cameras, microphones and tape
recorders, typically in a secretive or unobtrusive
manner, to gather and accumulate evidence of
suspected quasi-criminal activity.
•Interception of Communications (e.g.
wiretapping): Devices to intercept otherwise
private communications such as e-mail, text,
telephone and other electronic communications.
• Electronic Tracking Devices: Devices to
monitor or ascertain the whereabouts of an
individual through electronic means.
• “Sneak and Peek” Warrants: Warrants that
permit covert entry into a premises in order to make
surreptitious recordings of evidence and/or to seize
and remove documents, records or things without
alerting the target of the ongoing investigation.
The JSOT in Context
This is not the first time that the OSC has
supported an initiative to enhance investigation of
those who commit serious capital markets offences.
In 2003, the OSC supported the RCMP’s creation of
the Integrated Market Enforcement Team (IMET), a
specialized police unit devised to tackle white collar
criminals. Backed by federal financing of more than
$30 million per year, the team charged only nine
individuals between 2004 and 2008. While IMET is
still operational, it has been widely viewed as a failure.
The problem with IMET is the disconnect between
the RCMP and the day-to-day regulation of the capital
markets. The IME T is ultimately a reactive policing entity
that is not positioned to engage in active enforcement.
By comparison, the JSOT investigators are specialists
who are therefore integrated into the OSC’s regulatory
environment. Vesting them with police powers should
provide the necessary tools to effectively investigate
the most serious of securities crime. The challenge for
investigators will be to embrace their new powers and
shift the internal OSC culture from one of passive, reactive
investigation to a more proactive approach.
Early signs are promising for the JSOT. Since
October 2013, the JSOT has already charged
individuals and groups on five separate occasions for
allegations including fraud, unregistered trading and
Challenging the JSOT in Court, A Look to the Future
While the JSOT has to date laid several charges,
its future will hinge on the success of its prosecutions
in the OCJ. The key battle zone in many of these
cases will be a challenge to the admissibility of
evidence that was obtained using the Criminal Code
warranting provisions, a process which requires a
deep knowledge of search and seizure law from both
the criminal and regulatory perspective and of the
securities industry in general.
Understanding the scope and limitations of
the JSOT’s powers is a first step to dealing with
investigations and defending prosecutions. It
recognizes that, thirty years after we witnessed Tony
Montana caught with a hidden camera, the future of
securities investigation has arrived.
WeirFoulds’ Anti-Corruption, Anti-Money Laundering and
Regulatory Compliance team helps business entities,
organizations and individuals confront and pursue regulatory,
criminal and commercial investigations, and assists them in
developing compliance policies and procedures.
For more information contact:
email@example.com | 416.947.5082
1. A “boiler room” is a slang term used to describe an
operation wherein fraudulent security issues are sold.
The “boiler room” is the physical office wherein shady or
fraudulent stocks are sold, typically using high pressure
techniques and false promises to vulnerable investors.
2. R.S.C., 1985, c. C- 46
3. The Ontario Provincial Police appointed investigators of
the JSOT team Special Constables pursuant to section